According to recent studies, it appears financial advisors are not as keen on mutual funds as they have been in the past. Exchange traded funds (ETFs) have naturally stepped up to fill the void.According to the Financial Research Company, advisors are not selling mutual funds as often as they have in the past. The number of mutual funds being sold plummeted following the market’s crash in 2008, and since then, the number has been on a steady decline.
Daniel Tovrov for Mutual Fund Wire reports that advisors that have turned away from mutual funds are using alternative investments such as ETFs. A total re-evaluation of the buy-and-hold strategy has been put into place, and many investors and advisors prefer an investment tool that helps them move seamlessly in and out of an investment. [ETFs vs. Mutual Funds: And the Winner Is…]
This shift could become a lasting effect of the credit crisis. The mutual fund industry may be proving itself to be too restrictive with too many limitations, while ETFs continue to lure investor money with transparency, flexibility and far more ease of use. [The All-ETF 401(k).]
For more stories about mutual funds, visit our mutual funds category.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.